Managing organisational change: The case of Omega Industries

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Section-1

  1. Doggett (2005) believes that there is always a cause behind any problem and this cause must be identified and addressed to solve the problem or else the problem may continue. So, a consultant must use the diagnostic process as the initial step to identify the actual cause of the problem (Cope, 1999). This approach of continuous probing helps a consultant to differentiate symptoms from root causes.
  2. The symptoms of problems face by OI along with the root cause(s) can be:

    1. Low moral of the management and the work force. The root causes identified here are the policies of redundancy and cost cutting and also the low confidence of workforce in the newly appointed management.
    2. Poor communication between managers. This is possibly due to the conflict of interests and lack of trust among the general mangers.
    3. Low productivity. This is due to the lack of coordination between the departments and the poor warranty handling and client handling policies. Others causes include lack of innovation in designing product(s) and poor marketing strategy.
    4. Overstocking of products. This is due to the inaccurate demand forecasting, inadequate & insufficient information about customer needs and the lack of understanding about the customer needs.

    Fischer, which made a cascading impact on the OI and thus resulted into most of the above mentioned symptoms and their respective root causes.

  3. Much of the chaos in Business Services is because of the complex departmental structure within it. One way of handling this structure is to integrate the Sales and the Marketing departments into one department under the director of the Sales as he has got the better client contacts and who can understand and address the customer needs better. Similarly, the Parts services department can also be brought under the GM Engineering support services by which overspending budget can be controlled and the demands of the parts can be met on time. This particular integration will handle the overstocking problem as well. Another structural approach for improving the sales--marketing interface or parts-engineering support is to form cross-functional teams composed of people from the two functional areas along by rotating managers and other workforce within the dependent departments. This approach can serve two purposes; first, through job rotation, employees develop a larger network of people within the firm that can be called on when opportunities or challenges arise and second, through immersion in different functional areas, managers can develop a better understanding of their counterparts' culture, activities, constraints, and objectives.
  4. The next piece of advice would be to implement Information System such as Customer Relationship Management (CRM) application software across OI or especially across Business Services, where information about customers, customer interactions, procurements, inventory etc can be entered, stored and accessed by employees across departments. The data thus maintained can be analyzed to determine the customer needs and forecast demand thus helping OI to improve its services, inventory management and products. Besides improving communication and coordination across different departments within Business Services, this application software will also help in attaining better customer satisfaction and retaining existing customers.

    The last advice would be to stop the redundancy program, as it builds fear and insecurity and can lead to lack of coordination and individualistic approach of departments. So, to encourage cooperation and coordination the HR department needs to strengthen the relationships between the inter-departments, by means of Appreciative Inquiry and thus encourage people to share the best practices in the organisation (Hayes, 2007).

  5. The above mentioned advices when implemented can face some serious resistances like the resistance from affected key stakeholders; the GM Marketing and the GM Part services, who would definitely resist this change as their positions would be affected directly. This resistance can be handled by making the GM Marketing redundant as this post is not directly in touch base with customers and always depends on sales and support department to make marketing forecasts. Similar approach can be taken for the post of GM Part services, which can be handled by the GM Support services. Other key stakeholders that may also resist the change can either be made redundant or can be given roles with better incentives or roles with more responsibilities within OI or in other companies under the same parent company.
  6. According to Clampitt et. al. (2000), the most effective way of communicating change is to "underscore and explore", where the individuals are empowered to generate creative ideas and alternatively listen to "potential misunderstanding and unrecognized obstacles" rather than being forced to adopt the ideas of management. So, for this presentations or seminars can be organised where employees can be made aware of the change and its associated benefits and can be asked about their opinions. Cross department training and development programs can also be organised by the HR department to develop the necessary skills and minimize the resistance towards the change and to make a department such as sales or marketing, aware of the functioning of other departments such as engineering support services so that each of the departments communicate with one another on a longer run.

    Another problem can be in the implementation of the Information system where employees such as the sales personnel would be least interested and have the minimum scope of using computers to access the information system. In this case these employees need to be convinced about the potential benefits of using this IS and can be given gradual training to know more about the information system.

    The basic idea is to involve more people in the change process by making them understand their responsibilities in contributing to the transition process and thus minimising the resistances faced by the top management. Here the need of the hour is the strong leadership and commitment from the CEO and senior management, where they should ensure that the whole change process is in line with the new strategies of the company.


Section-2

Management Consulting is defined as 'delivering skills from outside an organisation'' (Markham, 2004). It is important for an external consultant like Timothy to choose an appropriate model that delivers the real value for the client organization. A good consulting model should also allow a consultant to deliver his knowledge, skills and experience in an efficient way in improving the consultancy practice.

Now, in the context of the case, the initial steps towards addressing the problems are by using consultancy and therefore calls for understanding of client-consultant relationship in depth using the below models and theories. Edward Schein's (1987) three models for consulting are commonly viewed as a starting point from which client expectations can be understood and consultant roles can be defined (Wickham & Wickham, 2008). These are; purchase-of-expertise, doctor-patient, and process consultation.

The Purchase-of-Expertise model is one in which the client hires the consultant to bring a separate and autonomous perspective to existing issues. The client communicates the problem to the consultant and he executes a solution by using specialist knowledge (Wichkham & Wickham, 2008). This model may meet immediate needs or the efforts to put structural changes into place, but will do little to sustain development or the organisation over the time.

The Purchase-of-Expertise model is one in which the client hires the consultant to bring a separate and autonomous perspective to existing issues. The client communicates the problem to the consultant and he executes a solution by using specialist knowledge (Wichkham & Wickham, 2008). This model may meet immediate needs or the efforts to put structural changes into place, but will do little to sustain development or the organisation over the time.

The Process Consultation model is a client centred approach in which the consultant acts as a facilitator and brings his own expertise to methods for directing potential organisational behaviours. The consultant works with the organisation to find internal methods for resolving the issues and for implementing change, and utilising existing resources within the organisation. This process is based primarily in the ability of the organisation to sort through its needs, discover its own resources and the best methods for change, and implement changes using its own internal resources. The consultant simply acts as a catalyst directing and redirecting activities to help the organisation achieve the best outcomes based on its needs and thus making the change happen (Schein, 1987). The consultant does not push a solution to the client and it is the client who makes the ultimate choice of implementing the solution (Wickham & Wickham, 2008).


Reason for selecting Process consultation model:

In this case study, the initial attention is paid to the client-consultant relationship where, Timothy is hired for his expertise and for guiding OI, which has less clarity about its specific issues and concerns. Timothy works with the OI management through the diagnostic and intervention stages (Czander & Eisold, 2003). In the diagnostic stage Timothy gathers the data required to understand the problem by meeting and interviewing managers and finally evaluates it to understand the root cause of the problem (Cope, 1999). The consultant then uses his expertise to plan an intervention model to address the root causes of the issues faced by the OI. As there is high risk involved, OI would look for solution which involves intensive analysis and is exclusively customized to its needs and for this the process consultation model provides OI the power and flexibility to decide and take action on implementing the intervention proposed by the consultant (Whittle, 2006).


Five phase Model of Management Consulting

Over the years researchers suggested various models and approaches to consulting, but they all seem to be built around the five phase consulting process or cycle model (Kubr, 2002). For instance, Markham (2004) also suggested model 'the CONSULT delivery process' with five stages; Entry, Contracting, Diagnostic, Intervention and Closure.

The five phase consulting model provides a systematic phase by phase framework to consultants about how to plan their approach to a particular assignment and for the same reason this model can be associated with the case of OI. This consulting model consists of five phases; Entry, Diagnosis, Action Planning, Implementation and Termination.


Entry:

It is the initial phase of consulting process cycle that involves the initial meeting of the consultant with the client and the discussion about the purpose of bringing in the consultant. The consultant prepares for the first meeting by gathering information about the client, their business, history and organizational culture and structure. The client tries to apprise the consultant of the problems it is facing and the consultant does a preliminary diagnosis of the problems. According to Kubr (2002), both the client and the consultant, together decide the scope of the assignment and the client ensures that it has approached the right consultant and the consultant has the necessary expertise to deliver the results as per the client's needs.

In the case study, it is evident that the consultant Timothy Edwards has been appointed and apprised of the problems of the OI. He has a fair idea regarding what the firm is trying to achieve by taking his services.


Diagnosis:

This phase involves an in depth analysis of the root causes of the problems and collection of information to develop solutions to those problems. This phase is regarded as most value addition from consultant's side as it involves understanding the issues further by establishing timelines, processes and the information needed to be gathered to work out solution. The main idea is to discover more about the issues faced by the client and what could be helpful in addressing them. More importantly, the client has to be involved actively. Kubr (2002) considers this phase as an important one as there is a need to maintain a positive client - consultant relationship, where the client must be provided feedback about the consultant's progress and investigation approach to prevent any confrontation from the client's side. The diagnosis phase ends with submission of report regarding the progress on the assignment and signing off the consulting contract.

The case study indicates that Timothy has gathered information about the issues by interviewing the senior management and has provided the feedback to the CEO, who has given his consent to the consultant to further analyse and design a new structure for the Business Services.


Action Planning:

The action planning phase is the stage where the actual solutions are prepared and proposed by the consultant. The consultant generally finds more than one solution which he proposes to the client and helps the client understand and choose the one best ones suited to their need. The consultant makes sure that any factor that might be a risk to the change implementation is recognised and addressed in advance. He also explains about the conditions that might be necessary for the solution to be implemented and about the future plans/strategies of the organisation that might be affected by the change. The consultant also puts together a plan for implementation with details of key people involved and the way the solution will be implemented.

The action plans identified in this case study include the change in the management structure of the Business services where merging of departments like the marketing and the sales will address the customer needs better and reduce the conflict of interests within those departments; the implementation of CRM application will result in better demand forecasting and customer service.


Implementation:

It is final phase of the collaborative approach between the client and the consultant, where the actual implementation of the agreed solutions takes place. The consultant may also be actively involved in guiding the client about the continuous improvements in a case where the client feels that the action plan requires a major change in the structure and the culture of the organization; and it cannot handle the change without proper expertise or guidance of the consultant.

It is evident from the action plan phase that the Business Services would require a restructuring and an introduction of a new CRM technology. This type of change could evoke resistance from the key stakeholders such as the general managers or the employees of the company. Hence, the implementation phase may require guidance of the consultant to manage the key stakeholders and align their interest with the business strategy of the OI. The crucial thing here can be the change implemented with roles and expectations may require proper communication to the employees and for this consultant can play important role along with the HR department for designing a proper training program to enhance employees' skills to fit them in the new organizational culture.


Termination:

This is the final phase which marks the end of the assignment, provided the project has served its purpose as per the satisfaction of the client and the consultant, which can be evaluated at the end of the implementation phase. There can also be a room for extension of the project if the client feels there is a need for revising some part of the implementation or for expanding the scope of the project to other parts of the organisation. In this phase, the client and consultant can take a call whether the implementation has been a failure, success or something in between (Kubr, 2002). The circumstances and situation under which the client - consultant relationship terminates will determine the repeat business for the consultant.

In the context of the case study of the OI, it is difficult to anticipate how the current assignment of the consultant, Timothy Edwards, ended.


Conclusion:

The above analysis has been drawn based on the information available from the case study and the models used should not be considered one that fit all solutions as these provide a framework that can be adapted depending on the situation.


References:

Clampitt, P.G., DeKoch, R.J., and Cashman, T., (2000) A Strategy for Communicating About Uncertainty, Academy of Management Executive, 14(4), pp. 41-57.

Cope, M. (1999). The Seven Cs of Consulting: The Definitive Guide to the Consulting Process. London: Prentice Hall.

Czander, W. Eisold, K. (2003). Pyschoanalytic perspectives on organisational consulting: Transference and counter-transference. Human relations. 56(4), pp. 475-490.

Doggett, A.M., (2005) Root Cause Analysis: A Framework for Tool Selection. The Quality Management Journal, 12, pp. 34-45.

Hayes, J. (2007). The Theory and Practice of Change Management. Second Edition. Hampshire: Palgrave Macmillan

Kubr, M. (2002). Management Consulting: A Guide to the Profession, 4th edition, Geneva: International Labour Office.

Markham, C. (2004). The Top Consultant: Developing Your Skills for Greater Effectiveness, London: Kogan Page

Schein, Edgar H. (1987). Process consultation Volume II: Lessons for managers and consultants. Reading, Mass: Addison-Wesley

Whittle, A. (2006). The paradoxical repertoires of management consultancy. Journal of Organisational Change Management. 19(4), pp. 424-436.

Wickham, P and Wickham, L. (2008). Management Consulting: Delivering an Effective Project. Third Edition. Essex: Pearson Education Limited.


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